Comcast, which is a major player in VOD with some 8 million homes connected, runs a free service, with some older movies and other middling programming, but not much in the way of real demandable video--big-time network shows. Now Comcast and Fox Broadcasting are moving closer, agreeing to let Fox's new successful prime-time drama "Prison Break" play a bit in the VOD space.
It's in play mode because the "Prison Break" package centers around a 30-minute catch-up special that offers scenes from early episodes and interviews with the stars. "Prison Break" here acts like a marketing tool. Comcast hopes that networks like Fox will move forward once they realize the real promise of VOD.
But networks are not there yet. There are real money and other business issues to tackle. For networks, that means not biting the hands that feed them, including that of their affiliates. When and where does an original or repeat episode run on VOD? How does it affect the network's advertising sales? Do its affiliates get compensated? What about union issues?
Some of those last concerns have already come to the surface and caused headaches surrounding Walt Disney's decision to let some ABC network and Disney Channel shows be sold on a per-episode fee via Apple's iTunes Music Store. Immediately after the Disney news, ABC affiliates complained loudly that they weren't advised of the move ahead of time, since the arrangement could conceivably affect their bottom line in years to come.
Right now, the possible erosion from the iTunes deal or a VOD deal is limited, considering the tiny distribution of these after-market media venues. Also add into this stew, though, the slow rise of digital video recorders that allow for time-shifting of programs out of their normal network schedules.
For media companies the real concern is getting too close to their long-time, and sometimes adversarial, business partners. No longer are they making broad cable network and broadcast network distribution deals with cable operators--but program-by-program deals.
That's at the heart of their network business--which scares executives to no end. What's to prevent producers from going directly to cable operators and bypassing networks? Nothing, in theory. Maybe the scare factor isn't that great since, for the most part, networks are financial partners in all their shows. But there are still a lot of business interests to consider, which is why they don't want to make VOD more like TBU--TV-by-ultimatum.